it all comes down to what type of vehicle you are buying and the depreciation of particular model. Another factor is price actually paid when buying new. before covid, no one paid msrp. i paid 12k less than msrp, for a pickup in 18. the depreciation curve for my pickup has been much flatter than someone would typically assume for a new vehicle. and having no maintenance cost, beside oil changes has helped that. it really comes down to what vehicle you are interested in.
New Versus Used Calculation
- Thread starter linuxology
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I buy new cars because I want a new car. If I chose to do everything in life because it was cheaper I think life would be pretty boring.
I haven't checked in a while but I am pretty sure I could sell my Audi today for less than 10% less than I paid for it... And it's five years old.
I haven't checked in a while but I am pretty sure I could sell my Audi today for less than 10% less than I paid for it... And it's five years old.
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When I bought my truck in 2018, the same truck brand new was ~$5000 more vs 1 year old with 12k miles. Alot of people would say "its just $5000 more". Realize that is almost 1 year of payments, and it takes saving $600/month for a year to recoup that.
You will have to cross shop the specific vehicle you are looking for to compare.
In general I feel people are willing to throw around thousands of dollars like it's nothing. I view the "initial purchase price" as the most important factor.
You will have to cross shop the specific vehicle you are looking for to compare.
In general I feel people are willing to throw around thousands of dollars like it's nothing. I view the "initial purchase price" as the most important factor.
i found it to be the exact opposite, a 5-7 year old pickup was 30k and was out of warranty. i could purchase the same truck for 40k with a warranty and paid less in interest on a new vehicle versus and old one. I wasn't paying 30k for a used truck with no warranty. i found to get down to 20k it had to have about 100k miles. so in essence i was paying half of what the first person paid with about half of the vehicles useful life left and i was going to have to pay to fix all the issues that were going to go out between 100k and 200k miles.
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I didn't thought because when i trade the truck in at 100k, ill get 20k for the vehicle. And i got the best out of that truck and didn't have to spend any money fixing it. the next person will spend 20k plus more in interest and will have to spend money to keep it on the road. and by the time they go to sell it, it will be basically worthless.
A 3 year old, 35K vehicle will need service, tires, etc. So it is not exactly apples to apples or everyone would do it.
I generally buy new nowadays. But I bought our GS350 used because new was just too expensive and I just didn't care.
I generally buy new nowadays. But I bought our GS350 used because new was just too expensive and I just didn't care.
When I got wife's 2019 Prius new I looked at the depreciation curve for an extraordinarily common, commodity-style vehicle and found it flat. There weren't any "good spots" where the "savvy buyer" could get better-than-average value. Well, there were two: total junkers and brand new. We figured we were some of the best people to buy well maintained used cars from. So we decided to buy new so we'd inherit our own well-maintained used car when we paid it off.
An advantage to 15 year old vehicles, hinted at but not really mentioned, is how the parts get re-engineered to solve problems, cheaper aftermarket options are available, and mechanics (and youtube) know how to work on the common problems. The correct well-aged car can be more reliable because we know the warning signs of troubled systems and can address them when convenient. Some brand new wonder-car can be in the shop for days, running up bills, while it's "patient zero" for some new crazy failure.
An advantage to 15 year old vehicles, hinted at but not really mentioned, is how the parts get re-engineered to solve problems, cheaper aftermarket options are available, and mechanics (and youtube) know how to work on the common problems. The correct well-aged car can be more reliable because we know the warning signs of troubled systems and can address them when convenient. Some brand new wonder-car can be in the shop for days, running up bills, while it's "patient zero" for some new crazy failure.
A 3 year old vehicle will need tires-but not much else. Outside of this forum owners don't change their transmission fluid-or other fluids that soon.
It was going on long before, used car prices have been out of control for a decade.
Some on here have a goal to buy the cheapest transportation they can find-and drive it until it dies. Personally-My goal is to buy/drive as many new/slightly used vehicles I can talk my wife in to. Neither side should judge the other-but it does happen. I traded in my Silverado-which I paid $43,000 for and received about 15% less than I paid. Drove it for 40 months. The math works out pretty good. Bought a slightly used 2020-F150 Lariat.
That’s what I think a lot of people can’t comprehend. You can spend more to buy something new and/or expensive but the cost of ownership can be less than something used or older.
An extreme example is basically any Porsche GT car. People will pay 40k over sticker, own it for 2-3 years and still sell it for a profit.
Last car we got in 2015, 2 years old, 30k miles, about $7k less than new. 5 years ago they atleast were a noticeable savings over new. Now a car with 60k miles they ask new msrp.
I would agree that frequent trading of certain type of vehicles is very easy-and soft on the pocketbook if you know what your are doing. OR-at least it has been. Hard to know with the escalation in new car prices (the last three years) if one will still be able to do so. However-some on here are risk adverse to a car payment and being able to drive a late model vehicle.
I worked in my field for ~ 40 years after MS college degree and saved ~ 5% of every paycheck. When I came within 15 years of retirement, I purchase a new vehicle I wanted and will continue to do so until I am not allowed to drive. I give my well-maintained vehicles to my children or Grandchildren at ~ 90,000 miles. Several are still in the family a over 170,000+ miles running well. I feel money was well spent.
Is the new car you want in the lot? If you can wait, it seems new is better if less than 30,000 miles is your goal.
The inflated priced used cars make new look better as well. It was turning my stomach what a used car was going to cost when I looked in my 75,000 mile range, which is usually where I look. I kept dropping my mileage to finally find the balance between inflated and quality.
Time was the only reason I bought a 15k thousand mile car instead of new. The price wasn’t different,but I couldn’t wait 5 months for a new one to come in.
For the first time since 2001 I had to get a loan for a car.
The inflated priced used cars make new look better as well. It was turning my stomach what a used car was going to cost when I looked in my 75,000 mile range, which is usually where I look. I kept dropping my mileage to finally find the balance between inflated and quality.
Time was the only reason I bought a 15k thousand mile car instead of new. The price wasn’t different,but I couldn’t wait 5 months for a new one to come in.
For the first time since 2001 I had to get a loan for a car.
Seems a rather high entry cost into that game. great if you have it! I presume they drive something else in the meantime.
Ha! The internet is full of people ready to throw OPM around. Their free-handedness amazes me. It's just $5000. YOLO and all that BS,
They're all dental floss empire heirs, dontchaknow.
Yes: initial purchase price. Keep forever, zero worry about depreciation . I'll put $$$s into a car worth $500 because it still has utility and has always had impeccable care.
In 40 years I have purchased six cars. Two new. I still have three of them. Traded one in. Another was destroyed in a rear end collision. The third I gave to my little brother who still drives it.
Their ages are 60, 36, and 18 [as of Jan.13th 2023]
New? I see nothing I'd buy.
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Recently purchased a 2022 Yukon. Being in the military, we put a lot of miles on our vehicles and generally consider that we will wear them out before they age out of daily use.
Given this, when car shopping I generally subtract new price from resale value at the end of useful life (say 200k), then calculate per mileage depreciation. Good used value is anything substantially below the depreciation per mile. This is assuming the vehicle will wear out before age out. Could do this time-based too.
For our recent purchase, went like this: 70k new - 10k used @200k miles (conservative?)
That's $60k to depreciate over 200k miles. For a used model with 50k miles, 60/4=15k. It's burned through 15k of mileage based depreciation; thus, retail value should put it at 55k. A good deal to me for dealing with the uncertainties of buying used would be anything below 50k.
Those who have been tracking the used car market know that the past couple years have had insane valuations. Thus we made the decision to buy new.
Financing was 0 percent at the beginning of the year, so no cost to hold a larger loan ... in fact a better rate than used financing and no opportunity cost over purchasing with cash.
Additional factors for us were the body style changes on the recent Yukon giving more rear legroom and cargo space, plus the peace of mind with a new vehicle. Given that this purchase may last the entirety of our child-hauling years - it was the right choice for us.
Given this, when car shopping I generally subtract new price from resale value at the end of useful life (say 200k), then calculate per mileage depreciation. Good used value is anything substantially below the depreciation per mile. This is assuming the vehicle will wear out before age out. Could do this time-based too.
For our recent purchase, went like this: 70k new - 10k used @200k miles (conservative?)
That's $60k to depreciate over 200k miles. For a used model with 50k miles, 60/4=15k. It's burned through 15k of mileage based depreciation; thus, retail value should put it at 55k. A good deal to me for dealing with the uncertainties of buying used would be anything below 50k.
Those who have been tracking the used car market know that the past couple years have had insane valuations. Thus we made the decision to buy new.
Financing was 0 percent at the beginning of the year, so no cost to hold a larger loan ... in fact a better rate than used financing and no opportunity cost over purchasing with cash.
Additional factors for us were the body style changes on the recent Yukon giving more rear legroom and cargo space, plus the peace of mind with a new vehicle. Given that this purchase may last the entirety of our child-hauling years - it was the right choice for us.
Getting onto a preemptive maintenance schedule, replacing before failure on a time line, rather than a mileage routine has had benefits for me. No getting stranded by the side of the road from heat and time rotted belts, hoses, tires, poorly maintained transmissions {lifetime fluids....Sure... I believe you... NOT}.... etc.
Plus not letting the small things add up.
Something I learned from a book called "Why Trade It In" that was published decades ago.
One of my three most influential books [non-religious] : "Confessions Of A Medical Heretic", "Atlas Shrugged" and "Why Trade It In".
That philosophy has served me very well.
